Self-Devpt. Nuggets™

In 2003 my second year as a startup entrepreneur, I had the opportunity to benefit from the wisdom of the managing partner in a popular management training firm.

I had gone to introduce my service on website marketing strategy development to his organisation, in a bid to interest them in having a website newsletter set-up to ENHANCE the effectiveness with which they stayed in touch with people who attended their many training events.

It was during this session that the veteran banker turned trainer offered me some eye-opening tips on how to startup/build my business successfully.

What follows are some bullet point descriptions of the key points I can recollect from his pep-talk:

1. Looking At Business From A Financial Angle Is Outdated

Financing your business is not the most important thing to consider. What is crucial is that you adopt a strategic planning focus – instead of just budgetting. Typically, rather than concentrate majorly on where money to start up/run the business will come from, you will do well to think about how to define your target market and how to win its REPEAT patronage that will ensure you have enough revenue coming in to KEEP the business going AFTER it starts up.

In fact, you might just find that working this way could lead you to find prospective clients/customers WILLING to buy into your business thereby easing your startup capital sourcing efforts.

2. A Market-Relevant/Adaptable Business Strategy Is Essential

From my observations over the years since I entered into business, I am convinced that strategy is one of (if NOT) THE most underutilised and yet the most important element in business development.

You see, a lot of people TALK about strategy, but few ever USE it. Many claim to have one, but rarely APPLY it with any degree of consistency in running their business operations in a way that could yield useful information/results to guide their business decision making.

Yet when we look around at successful businesses across the world, it is consistently obvious that those which demonstrate an acute awareness of WHERE they want to go, and who take PROACTIVE action based on understanding of their target market/careful planning to get there, often end up leading the rest of the pack.

And what happens when you lead ( in product innovation, street-smart marketing etc)? Of course, you get more noticed by those who NEED what you have to sell, which ultimately leads to more sales – and profits.

3. But Budgetting Comes A Close Second

My coach however added that the fact that strategy precedes budgetting does not make the latter unnecessary. Once you have your strategy, you will be able to ESTIMATE what amount of time, effort, labour and capital (money etc) you will need to complement/implement it.

Working this way ensures you end up spending very little of your preciously limited money/time engaging in activities that will not help you move your business in the direction you want to go. A well thought-out strategy gives you focus, and ultimately helps you achieve maximum results with minimal expenses.

4. You Must Be Market Focussed

I will quickly confess that it took me YEARS to really get this one into my head, especially as it relates to going about daily marketing of my products and services to the right market. So don’t feel too bad if you find yourself struggling with it for a while too. Note however that in my experience, being market focussed does not mean you will only look to do/offer what the “market” say they want or need.

Sometimes what you have to offer may actually have the potential to DO MORE for the “market” than they realise. This could happen because for them it would be an “un-felt need” – something the “market” does not currently perceive to be relevant to their needs, but which when pointed out by you would suddenly register in their minds as the important need you have already identified it to be.

In otherwords, being market focussed really means KNOWING the type of people who make up your market – their demographics, psychographics etc – well enough to correctly determine what you have to offer that they will BELIEVE can REALLY benefit them, and which they will ultimately TAKE ACTION to purchase from you at a PROFITABLE fee. (Note the deliberate emphasis on profitable).

Developing YOUR STRATEGY – Compare Alternative Investments

In developing your strategic plan there are certain checks he (my coach) recommends your carry out in the industry you plan to serve:

A. Customers

– What is their bargaining power?

– What is their vigour of purchase?

– What is/are their reason(s) for buying?

When you have a reasonably representative sampling of answers to the above questions, you will be better equipped to tailor your product/service offerings to meet the needs of such customers in a manner that enables you profit from providing them.

B. Suppliers

– Identify the sources you will use for your supplies.

– How will you find the best bargains in PURCHASING your supplies? (Why spend more when you can spend less, and SAVE money to be used to cover other running expenses?)

– Identify the best sources for your utilities – water, power supply, telephone etc

C. Competition

– What “Power” and “Vigour” do your individual competitors have in the market you all share?

– What types of competitors are they? Direct (Provide similar/identical products or services)? or Indirect (Offer ALTERNATIVES to what you provide)

Who determines what happens in the industry e.g Pricing etc? Do you have any influence or do they have more clout/power/control ? What will you do to “protect” yourself?

D. Complimentary Product

You may want to explore/forge alliances with others who offer your target market some products/services that increase customers’ need for YOUR products and services.

E. Potential Entrants

What other business operations can startup in your target market in the future that could affect your business? You will need to be on the lookout for new/latest developments in this respect, so as not to be taken unawares by unexpected changes that could result.

A new entrant could – for instance -increase demand for a key input you use in your production operations leading to its limited availability and higher prices. If you are NOT ready for this when it happens, you might find yourself in trouble.

Summary

The above points demonstrate how essential it is to go beyond just planning to find money for your business. You will need to develop a strategic plan that will be used for daily decision making to ensure profitable long term operation of your business.

Because the strategic plan goes beyond budgetting, a typical business plan will not necessarily be enough to do it with – but the business plan could be a useful foundation to build on in developing/implementing an effective business strategy.

And just in case you are wondering how the above ideas helped me, I will let on that they have – over time – enabled me evolve a CUSTOM software development/marketing strategy that works very profitably in a market where software piracy is widely practiced.

Believe me, when I say that I only began to get my best results when I found myself completely broke – reinforcing the points made above that having a STRATEGY that works is of more crucial importance than having MONEY to work with!